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Accounting ll
Ch. 24 vocab
| Question | Answer |
|---|---|
| GAAP | Generally accepted accounting principles. Requires that revenue and expenses be recorded in the accounting period in which revenue is earned and expenses are incurred. |
| Revenue earned in one fiscal period but not received until a later fiscal period. | Accrued Revenue |
| Realization of Revenue | Revenue is recorded at the time goods or services are sold. |
| Adequate Disclosure | Financial statements contain all information necessary to understand a business's financial condition. |
| Interest earned but not yet received. | Accrued Interest Income |
| FYI – Interest Receivable on Balance Sheet | The interest receivable account appears in the Current Assets section of the balance sheet. |
| FYI – Interest Income on Income Statement | The interest income account appears in the Other Revenue section of the income statement. |
| An entry made at the beginning of one fiscal period to reverse an adjusting entry made in the previous fiscal period. | Reversing Entry |
| Expenses incurred in one fiscal period but not paid until a later fiscal period. | Accrued Expenses |
| Interest incurred by not yet paid. | Accrued Interest Expense |
| FYI – Adjusting Entry for Accrued Interest Expense on Income Statement | The income statement will report all expenses for the period even though some of the expenses have not yet been paid. |
| FYI – Adjusting Entry for Accrued Interest Expense on Balance Sheet | The balance sheet will report all liabilities, including the accrued expenses payable. |
Created by:
mmincy
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